We have long been a part of a global economy, but its only over the last decade that we have fully realized its potential – the possibility of buying and selling goods and services across the world through a virtual interface. Of course, E-commerce has largely contributed to this sudden and expansive growth. The market space has expanded and so have customer choices. And it’s not just E-commerce we are talking about. Take any other industry – FMCG goods, your favourite restaurant, the local vegetable vendor, medical supplies, and more. You’ve probably heard of this marketing concept – ‘the right product at the right place, in the right quantity and at the right time’. Once upon a time, this was what differentiated a good business from an average one. Today, however, it is what keeps a business alive.
According to a research by Novonous, the logistics industry in India is expected to grow up to USD 301 billion by 2020. In order to keep up with the explosive supply chain requirements, companies have two options. A – they can invest in an in-house logistics wing. B – they can outsource the requirement to 3PLs (third-party logistics). If you’re looking to take your business to the next level, here’s why you should consider 3PLs.
1. Focus on what’s important
Say your business deals with supplying raw fabric material to production houses. It’s safe to say that you know everything about fabrics and yarns, but you probably don’t have the slightest clue about shipping, docking, or warehousing. This means you can either hire an entire team and start learning the ropes of this rather complex industry by figuring out international regulations, securing licenses, clearing customs, and the like; or you could simply outsource it to the experts and focus on what’s important.
2. Cost efficiency
If you’re running a business, you should and deserve to make a profit. Anyone who says otherwise is probably talking about charity. One of the most important aspects of a healthy business is a healthy financial statement, in other words, controlling expenses. That being said, creating a supply chain from scratch is no walk in the park. So, rather than building a dedicated facility, hiring warehouse units, investing in a fleet, and spending a fortune, it’s far more feasible to outsource the requirement to a 3PL.
3. Smooth operations
Having an international market comes with its share of expenses. From sending products across borders to clearing customs, storing it in warehouses, handling door-to-door deliveries, and dealing with foreign rules; there’s a boatload of operational hiccups that you’ll face. To forgo the unnecessary burden, partner with a 3PL that has an international presence. It not just helps your products reach customers on time, but it also cuts down on the lead time from production to delivery, operational expenses, and will save you much misery.
4. Scaling It
Occasionally, you may face fluctuations in the business. Sometimes, the demand for products during festivities tend to shoot through the roof. At other times, it may seem to be a lull. On such occasions, 3PL providers allow you to scale your business in terms of space, manpower, and vehicles among others without having to invest in additional resources. In fact, the best part of collaborating with a 3PL service is that you pay for what you need. This way, you can tap into the power of a global marketplace with far fewer risks and expenses for a much higher return. Isn’t that what good management is about?